DoD's $35.7M Bradley Track Contract Awarded Sole-Source to ContiTech USA, Inc

Contract Overview

Contract Amount: $35,746,579 ($35.7M)

Contractor: Contitech USA, Inc

Awarding Agency: Department of Defense

Start Date: 2006-11-01

End Date: 2010-04-30

Contract Duration: 1,276 days

Daily Burn Rate: $28.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: BRADLEY TRACK

Place of Performance

Location: FAIRLAWN, SUMMIT County, OHIO, 44333

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $35.7 million to CONTITECH USA, INC for work described as: BRADLEY TRACK Key points: 1. The contract awarded to ContiTech USA, Inc. for Bradley tracks represents a significant investment in armored vehicle sustainment. 2. The sole-source nature of this award warrants scrutiny regarding potential price inflation and lack of competitive pressure. 3. A long contract duration of 1276 days suggests a sustained need for these critical components. 4. The firm-fixed-price contract type offers some cost certainty for the government, but the absence of competition limits upside. 5. The contract's focus on a specific component for a major military platform highlights its strategic importance. 6. The lack of small business involvement (ss: false, sb: false) indicates this contract did not prioritize small business participation.

Value Assessment

Rating: questionable

Benchmarking the value of this $35.7 million contract is challenging without comparable sole-source awards for Bradley tracks. However, the absence of competition typically leads to higher prices than would be achieved in a fully competed environment. The firm-fixed-price structure provides some cost predictability, but the government may not be realizing the best possible value due to the lack of market pressure. Further analysis would require understanding the specific technical requirements and the availability of alternative suppliers.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, ContiTech USA, Inc., was solicited. This approach is often used when a unique capability or proprietary technology is required, or in cases of urgent need where competition is not feasible. The lack of multiple bidders means there was no direct price comparison or negotiation against alternatives, potentially impacting the final price.

Taxpayer Impact: Taxpayers may have paid a premium for these Bradley tracks due to the absence of competitive bidding. Without competing offers, the government had limited leverage to negotiate the lowest possible price, potentially leading to less efficient use of public funds.

Public Impact

The primary beneficiaries are the U.S. Army units relying on the operational readiness of Bradley Fighting Vehicles. This contract ensures the supply of critical track components, essential for the mobility and survivability of armored personnel carriers. The contract's geographic impact is primarily within Ohio, where ContiTech USA, Inc. is located, potentially supporting local manufacturing and employment. The workforce implications include the direct employment at ContiTech USA, Inc. and its supply chain, supporting specialized manufacturing roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the procurement process due to single-bidder solicitation.
No indication of small business participation or subcontracting opportunities.
Long contract duration could mask inefficiencies if not closely monitored.
Reliance on a single supplier for a critical component poses supply chain risk.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Ensures a consistent supply of a critical component for military readiness.
Award to an established manufacturer suggests a focus on reliability.
Contract supports domestic manufacturing capabilities for defense equipment.

Sector Analysis

The defense manufacturing sector is characterized by high barriers to entry, specialized production requirements, and significant government investment. Contracts for armored vehicle components like tracks are vital for maintaining the operational readiness of ground forces. The market for such components is often consolidated, with a few key players possessing the necessary expertise and facilities. This contract fits within the broader category of military vehicle manufacturing and sustainment, a critical segment of the defense industrial base.

Small Business Impact

This contract does not appear to have included a small business set-aside, as indicated by 'sb: false'. Furthermore, the 'ss: false' flag suggests no specific small business subcontracting goals were mandated. This means that opportunities for small businesses to participate in fulfilling this contract, either as prime contractors or subcontractors, were likely limited or non-existent. The absence of small business involvement in such a significant award could impact the broader small business defense ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management structures, specifically the Defense Logistics Agency. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Bradley Fighting Vehicle Systems
Armored Vehicle Component Manufacturing
Defense Logistics Agency Procurement
Military Ground Vehicle Sustainment

Risk Flags

Sole-source award
Lack of competition
Potential for price inflation
No small business participation noted

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.7 million to CONTITECH USA, INC. BRADLEY TRACK

Who is the contractor on this award?

The obligated recipient is CONTITECH USA, INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $35.7 million.

What is the period of performance?

Start: 2006-11-01. End: 2010-04-30.

What is ContiTech USA, Inc.'s track record with the Department of Defense, particularly concerning Bradley vehicle components?

ContiTech USA, Inc. has a history of supplying components to the defense sector. While specific details on their performance solely for Bradley tracks under this particular contract (336992) are not fully elaborated in the provided data, their role as a supplier suggests prior experience and capability. The award itself, valued at $35.7 million over approximately 3.5 years (1276 days), indicates a sustained relationship. Further investigation into past performance reviews, delivery timeliness, and quality metrics from previous DoD contracts would provide a more comprehensive understanding of their track record.

How does the $35.7 million contract value compare to typical spending on Bradley tracks?

Determining a precise benchmark for Bradley track spending is complex due to variations in track types, quantities, and contract structures (e.g., competitive vs. sole-source, fixed-price vs. cost-plus). However, $35.7 million for a single contract over roughly three and a half years suggests a substantial procurement. If this contract represents a significant portion of the annual requirement for Bradley tracks, it indicates a considerable investment. Without access to historical spending data across multiple contracts and suppliers, it's difficult to definitively state if this value is high or low. However, the sole-source nature raises concerns about potential overpayment compared to a competitive scenario.

What are the primary risks associated with a sole-source award for critical military components like Bradley tracks?

The primary risks associated with a sole-source award for critical military components like Bradley tracks include inflated pricing due to a lack of competition, reduced incentive for the contractor to innovate or improve efficiency, and potential supply chain vulnerabilities if the sole supplier faces production issues or goes out of business. Taxpayers may bear a higher cost without the benefit of competitive bidding driving down prices. Furthermore, the government has less leverage in negotiating terms and conditions. The long-term strategic risk involves dependence on a single entity for essential equipment sustainment.

How effective is the firm-fixed-price contract type in managing costs for this specific Bradley track procurement?

The firm-fixed-price (FFP) contract type is generally effective in providing cost certainty for the government, as the contractor assumes the risk of cost overruns. For this $35.7 million Bradley track procurement, the FFP structure means the Department of Defense knows the total price upfront, simplifying budgeting. However, the effectiveness in managing *overall* costs is diminished by the sole-source nature of the award. While the price is fixed, the absence of competition means that fixed price might be higher than it would be in a competitive environment. The government benefits from cost predictability but may not achieve the lowest possible price.

What are the historical spending patterns for Bradley track procurement by the Department of Defense?

Historical spending patterns for Bradley track procurement by the Department of Defense likely show a mix of competitive and sole-source awards, depending on market conditions, technological requirements, and urgency. Major defense contracts for tracked vehicles and their components often span multiple years and involve significant dollar amounts, reflecting the high cost of specialized manufacturing and the ongoing need for fleet readiness. Without specific historical data for this contract vehicle (NA 336992) or similar track procurements, it's difficult to establish precise trends. However, it's reasonable to assume consistent, substantial investment in maintaining the Bradley fleet's operational capability.

What is the significance of the PSC code (if available) or the North American Industry Classification System (NAICS) code for this contract?

The provided data includes the NAICS code '336992' for 'Military Armored Vehicle, Tank, and Tank Component Manufacturing'. This code is highly significant as it precisely categorizes the industry and the type of goods being procured. It indicates that the contract falls under the manufacturing of heavy armored vehicles and their essential parts. This classification helps in understanding the market dynamics, identifying potential competitors (even if not utilized in this sole-source award), and benchmarking spending against similar activities within the defense industrial base. It signals a specialized manufacturing sector with high technical requirements and regulatory oversight.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing

Product/Service Code: VEHICULAR EQUIPMENT COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 703 S CLEVELAND MASSILLON RD, FAIRLAWN, OH, 13

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $35,746,579

Exercised Options: $35,746,579

Current Obligation: $35,746,579

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: DAAE0703DN080

IDV Type: IDC

Timeline